Shoprite neck deep in debt, barred from transferring assets

Shoprite has been barred from transferring or getting rid of its assets out of jurisdiction.

The Federal High Court in Lagos made an order of mareva injunction stopping Shoprite Checkers (PTY) Limited from taking such actions over a $10m judgment debt.

When Shoprite announced its plan to exit Nigeria, the mareva injunction was made by Justice Mohammed Liman in favour of a Nigerian firm, A.I.C. Limited, which in 2018, secured a $10m judgment against Shoprite in a breach of contract lawsuit.

According to court papers, the $10m judgment was entered in favour of A.I.C. Limited against Shoprite by Justice Lateef Lawal-Akapo of the Lagos State High Court in Ikeja.

Displeased with the judgment, Shoprite went on appeal but it lost at the Court of Appeal and has gone to the Supreme Court.

In the July 14, 2020 mareva injunction, Justice Liman restrained

“the judgment debtor/1st respondent,” and its privies “from transferring, assigning, charging, disposing of its trademark, franchise and intellectual property in a manner that will alter, dissipate or remove these non-cash assets and other assets, including but not limited to trade receivables, trade payables, payment for purchase of merchandise, from within the jurisdiction of this honourable court.”

The judge also mandated the 2nd respondent, Retail Supermarket Nigeria Limited,

“to disclose its audited financial statements for the years ending 2018 and 2019 to enable the judgment creditor/applicant determine the judgment debtor’s/respondent’s funds in its custody in order to preserve same in satisfaction of the judgment of the Court of Appeal in Appeal No: CA/L/288/2018.”

A.I.C. Limited had in 2012 sued Shoprite Checkers (PTY) Limited; and Retail Supermarket Nigeria Limited for alleged breach of contract.

The Nigerian firm said it was the one, who invited the South African retail supermarket operators to Nigeria and opened their eyes to business opportunities in the country, with a view that they would go into a joint venture.